Small firms say immigration system must be flexible for all sectors and regions

Press Releases 24 Feb 2020

Tina McKenzie calls for migration policy to address needs of NI economy

  • New Federation of Small Businesses (FSB) report, ‘A World of Talent’, proposes new social care and remote community visas, meaningful options for the self-employed and expanded Migration Advisory Committee
  • It shows few small firms in a position to automate processes to cover lost access to EU skills without additional support  
  • Calls for reduction in immigration fees and exemptions as half of small firms say they cannot meet current costs for non-EU staff
  • Close to four in ten (38%) small employers have struggled to recruit the right staff over the past year, with more than a third (35%) of these citing the unwillingness of UK citizens to work in their sector as a reason for this struggle, according to the latest study from FSB, published today.

Half (48%) of small firms state that they would be unable to meet the immigration fees currently levied on employers when they hire non-EU staff should they be extended to all workers from around the world. Previous FSB research shows that 95% of small firms have no experience of using the UK’s current immigration system.    

Four in ten (41%) small firms that operate in the professional, scientific and technical services sectors have engaged EU contractors. A similar share (35%) of small firms operating in the information and communication industries have done so.  

The new report finds that more than one in ten (11%) small firms will have to radically change their business model or close altogether if they struggle to recruit EU workers in future.

Faced with a sharp contraction in available labour, a very small proportion say they would invest in machinery, IT processes or automation (5%), while a similar proportion say they would invest in training their existing workforce (8%). 

This report follows the release of a government policy paper confirming that the UK will move to a points-based immigration system from January 2021.    

As part of the new report, FSB recommends that the future points-based system: 

  • Includes a special visa for social care workers to help address the severe personnel shortages in that sector – acknowledging the fact that it will take 15 years to train enough UK citizens to address that shortage – and pilots a visa for remote communities that struggle to recruit talent, including those within popular tourist destinations.    
  • Keeps the cost of hiring EU and non-EU staff to below £1,000 for small businesses and exempts smaller firms from the Immigration Skills Charge (under the current system, the cost of a Tier 2 visa sponsorship to a small employer exceeds £3,000, a fee that would be unrealistic for the smallest firms).  
  • Includes a Global Talent visa which allows the self-employed to come to the UK without a job offer; removes any unreasonable barriers to UK entry for overseas contractors who bring flexible access to sought after skillsets.
  • Encompasses an urgent review of the Innovator Visa, which has been granted to just 14 individuals since its introduction last year.
  • Is fully tested and is able to meet the needs of small firms before it goes live.

Commenting, FSB NI Policy Chair, Tina McKenzie said:

“In order for the new Points Based System to be a success it must be small business friendly and suitable to the diverse range of skills needs in every part of the UK.

“This report highlights the challenge that small businesses will face with the vast majority having no experience of using the UK’s current immigration system.   

“While the Government has encouraged firms to automate and further train the existing workforce, the findings of this report indicate that this will be a struggle currently for small businesses and they need to be supported as we drastically change our migration system in such a short-time frame.

“In recognition of the particular pressures facing social care, we’re proposing a dedicated social care visa, enabling those struggling with mounting overheads and personnel shortages to recruit the overseas talent they, and our society, need to thrive.

“A flexible approach should also be taken to other sectors facing skills shortages, such as hospitality and agri-food.

“The work of the Migration Advisory Committee (MAC) recognised the distinct nature of the Northern Ireland Labour Market, sharing a land border with an EU member state and with lower private sector incomes than in other parts of the UK.

“A NI specific Shortage Occupation List should be established in light of the MAC’s previous recommendations, so we can properly cater for the needs of the local economy and allow businesses to continue to be sustainable.”